The present invention relates generally to product marketing and more specifically to a method and apparatus for sales volume and share decomposition used in conjunction with product marketing.
In today""s business world, a multitude of factors influence the sales and distribution of products. Due to such wide and mass distribution of products across the world, minor modifications in product marketing translates into amplified modifications in sales, either positively and negatively. Accordingly, it becomes extremely important to track these factors and relate them to the changes in sales. Today""s marketing tools include what is termed a volume decomposition system. Simply defined, a volume decomposition system is a system for breaking down sales volume distribution of a particular product and assigning it to causal factors. One example of a causal factor could be changes in the amount and quality of advertising for a particular product.
Advantageously, this system of decomposition moves the tracking of volume from being descriptive of the situation to being prescriptive of a solution. For example, noting that the volume of a particular product is down 100 units, while being descriptive, does not provide the reasons why the volume is down. In contrast, a volume decomposition system breaks down (i.e., decomposes) this 100 unit loss to enable the improvement of the amount of sales volume for a particular product. Logically, the more the volume is decomposed by a volume decomposition system, the more precise the prescription will be.
Prior art FIG. 1 illustrates a current system of volume decomposition. In particular, FIG. 1 is a graph, wherein the y-axis is the xe2x80x9call commodity volumexe2x80x9d (ACV) which is defined as the all of the volume for all of the commodities (i.e. products) sold for a particular point of distribution (e.g., a store). Self-defined, a point of distribution is defined as a location from which a product is being distributed (e.g., sold). Additionally, ACV is defined by the number of distributions for a particular product. The x-axis is the number of turns which is defined as the number of a particular product of interest that has been sold for a particular point of distribution. The variable xe2x80x9cD1xe2x80x9d represents the amount of distribution for a prior time period and variable xe2x80x9cD2xe2x80x9d represents the amount of distribution for the current time period. Similarly, the variable xe2x80x9cT1xe2x80x9d represents the amount of turns for a prior time period and variable xe2x80x9cT2xe2x80x9d represents the amount of turns in the current time period.
Using these variables, the total volume change is based on the following formula:
Total Volume Change=Volume Change due to Turns*Volume Change due to Distributionxe2x80x83xe2x80x83(1) 
In order to calculate the amount of volume change due to either the amount of distributions or the amount of turns, either the number of turns or the number of distributions are held constant. The variable that is held constant is then multiplied by the change in the other variable. For example, the following formula is used to calculate the amount of volume change due to turns:
Volume Change Due to Turns=D2*(T2xe2x88x92T1)=10*(5xe2x88x923)=20xe2x80x83xe2x80x83(2) 
Moreover, the following formula is used to calculate the amount of volume change due to distribution:
Volume Change Due to Distributions=T2*(D2xe2x88x92D1)=5*(16xe2x88x9210)=30xe2x80x83xe2x80x83(3) 
Accordingly for FIG. 1, the total volume change between the prior period and the current period equals 50 (a change of 20 due to turns and a change of 30 due to distributions). However, this analysis provided by this volume decomposition system is limited, as the decomposition is limited to distributions and turns for a particular product. Accordingly, it would be desirable to improve the current volume decomposition system.
The invention includes methods and systems for improved volume and share decomposition. In one implementation, a computer sends a request for sales volume information for a particular product to a database on a remote server. The database sends the requested sales volume information back to the computer. The database sends back sales volume information that includes the incremental volume for the particular product due to different merchandising conditions (e.g., a temporary price reduction) in two different time periods. Upon receipt of this sales volume information, the computer decomposes the volume change between the two different time periods.
In one such embodiment, the computer decomposes this sales volume information for a particular product by determining the change in the incremental volume for the particular product due to a change in the base volume being exposed to a particular merchandising condition for the product across two different, yet comparable, time periods. In another embodiment, the computer decomposes this sales volume information for a particular product by determining a change in the incremental volume for the particular product due to a change in the percent of the base volume that is exposed to a particular merchandising condition of that product across two time periods.
The computer also decomposes this sales volume information for a particular product by determining a change in the incremental volume for the particular product due to a change in the lift in incremental volume of a particular merchandising condition across two time periods. In another embodiment, the computer decomposes this sales volume information for a particular product by determining a change in the incremental volume for the particular product due to a change in the price discount of a merchandising condition to which the base volume is exposed across two time periods. In a further embodiment, the computer decomposes this sales volume information for a particular product by determining a change in the incremental volume for the particular product due to a change in an effectiveness of a given level of a discount of a merchandising condition in generating lift across two time periods.
The computer also provides a number of lists of causal factors that may affect the changes in the sales volume for a particular product. In one embodiment, the computer displays the changes in the sales volume for a particular product that includes those changes decomposed by the computer as well as the lists of causal factors affecting these volume changes. Still other and further aspects and embodiments of the present invention will become apparent by reference to the drawings and by reading the following detailed description.